Rural entrepreneurship and industrialization: Why is carpentry business not commercially viable in Tanzania?

Abstract

Promoting entrepreneurship and industrialization in the forest value chain calls for improving the ability of the value chain actors to commercialize their activities. In the wood furniture sector, carpenters in rural areas remained poor as they cannot create value for customers and capture a sizable value from the activity. This qualitative descriptive case study uses the Theory of Constraints to analyse factors which limit the ability of carpenters to commercialize their activities. Triangulate data collection from 18 purposively selected carpentry firms were analysed through the Current Reality Tree of the cause-and- effect technique. Limited financial resources, technology, and market-driven factors are the core limiting factors of the commercialization abilities of rural carpenters in Tanzania. Other factors include access to market, business orientation, infrastructure, legal and regulatory framework, and access to basic amenities. Carpenters in rural areas should create value to customers by accessing technology and capture a sizable value by changing their business models. The theoretical contribution of the Theory of Constraints, and the value chain theory is remarkable. Different financing model to enhance access to basic amenities and technology is important. Future research using the business model theory or industry architecture is suggested.